Building the World: Mapping Infrastructure Demand

Growth in income per capita and urbanization will drive demand for infrastructure across the BRICs, N-11 and GCC countries over the next decade.

At the high end, fast-growing and rapidly urbanizing countries like China and Vietnam could see annual growth rates of more than 15% in air travel, 8%-10% in electricity and technology, and 5% in roads. In already-rich and urban countries, such as Korea and the GCC states, annual growth could run at 1%-6%.

China will be the source of one-half to three-quarters of total incremental demand, although its share should decline slightly over the decade. India will be the dominant source of demand outside of China.

As a rough measure, total investment could be on the scale of $4.35trn over the decade. Of this, China would account for some $2.7trn (60%), India for $620bn (14%), and the N-11 and GCC together for $670mn (15%).

Our equity analysts identify a list of companies that should benefit from infrastructure investments. Sustained demand will have other important consequences for global markets, by intensifying pressure on commodities markets and fuelling the global expansion of firms based in the BRICs, N-11 and GCC. Financing needs could support the development of domestic capital markets, especially in China and India.